So this isn't the Titan project (alleged mmo-fps) Blizzard is working on, but a separate fps mmo?
It's almost certainly (if true) a separate project. I think you will see a number of devs try to establish the mmo-fps as a workable genre especially since the traditional mmo market seems flooded and shooters are hot. I'm ignoring things like World War Online and planetside, apb, crimecraft, etc in relation to this argument for the moment.
I kinda wonder though if the mentality of the people who play these two kind of games is different. Although I don't like rpg mmo's myself for the most part there was always a market there because of D&D for a sort of never ending experience in that regard.
I'm not sure shooters guys are craving that same sort of experience. Especially since the whole point of shooters is being on a level playing ground. The moment you feel somebody is better than you because they have access to better paid equipment or gear that you can't get for various reasons is the moment most shooter fans get turned off. In something like COD its different because everybody can grind to unlock that stuff. Bungie and Blizzard are smart guys so I'm sure they are aware of all that and more but I'm not sure how you build that compulsion loop without better gear and equipment like an RPG mmo.
I think there is a probably a compelling way to make a massive shooter with an ongoing structure but honestly no matter how good it is, I don't think I want to pay monthly for it based on just a single game. (At least at $15 bucks a month) But maybe they will surprise me and it will be so compelling I feel the need to play it.